The Economics and Psychology of Crime

Kevin Lewis

September 25, 2009

A Cure for Crime? Psycho-Pharmaceuticals and Crime Trends

Dave Marcotte & Sara Markowitz
NBER Working Paper, September 2009

In this paper we consider possible links between the advent and diffusion of a number of new psychiatric pharmaceutical therapies and crime rates. We describe recent trends in crime and review the evidence showing mental illness as a clear risk factor both for criminal behavior and victimization. We then briefly summarize the development of a number of new pharmaceutical therapies for the treatment of mental illness which diffused during the "great American crime decline." We examine limited international data, as well as more detailed American data to assess the relationship between crime rates and rates of prescriptions of the main categories of psychotropic drugs, while controlling for other factors which may explain trends in crime rates. We find that increases in prescriptions for psychiatric drugs in general are associated with decreases in violent crime, with the largest impacts associated with new generation antidepressants and stimulants used to treat ADHD. Our estimates imply that about 12 percent of the recent crime drop was due to expanded mental health treatment.


Hooliganism and Police Tactics

Panu Poutvaara & Mikael Priks
Journal of Public Economic Theory, June 2009, Pages 441-453

In this paper, we introduce a model of hooliganism to study how different types of policing can be expected to affect violence and the number of hooligans in violent supporter clubs. Hooligans differ in their preferred level of fighting, and obtain utility also from social identity that belonging to a supporter club gives. We find that an increase in discriminative policing, like intelligence units, always reduces violence. Indiscriminate policing, such as the use of teargas or random jailing of potential law breakers, may, however, backfire and result in smaller and more brutal groups.


Correlates of currency counterfeiting

Robert Morris, Heith Copes & Kendra Perry-Mullis
Journal of Criminal Justice, September-October 2009, Pages 472-477

Estimates from the U.S. Secret Service suggest that $40 million worth of counterfeit currency are confiscated each year in the United States. Despite measures to guard against the crime, modern technology has made reproducing fraudulent bills relatively easy. Over 90 percent of counterfeiting reported in the United States results from the use of readily available digital technology. Yet, little is known about the characteristics of the crime or those who engage in it. The current article presents a descriptive analysis of counterfeiting using data from closed case files from the Secret Service in a southern jurisdiction. Results suggest advances in consumer digital technologies have democratized the crime. That is, this form of offending is committed by a diverse group in terms of age, gender, race, and criminal history. The majority of counterfeiting cases involved multiple offenders, particularly among female counterfeiters. Sample limitations are discussed, as are recommendations for future research.


The Economics of Online Crime

Tyler Moore, Richard Clayton & Ross Anderson
Journal of Economic Perspectives, Summer 2009, Pages 3-20

This paper will focus on online crime, which has taken off as a serious industry since about 2004. Until then, much of the online nuisance came from amateur hackers who defaced websites and wrote malicious software in pursuit of bragging rights. But now criminal networks have emerged — online black markets in which the bad guys trade with each other, with criminals taking on specialized roles. Just as in Adam Smith's pin factory, specialization has led to impressive productivity gains, even though the subject is now bank card PINs rather than metal ones. Someone who can collect bank card and PIN data, electronic banking passwords, and the information needed to apply for credit in someone else's name can sell these data online to anonymous brokers. The brokers in turn sell the credentials to specialist cashiers who steal and then launder the money. We will examine the data on online crime; discuss the collective-action aspects of the problem; demonstrate how agile attackers shift across national borders as earlier targets wise up to their tactics; describe ways to improve law-enforcement coordination; and we explore how defenders' incentives affect the outcomes.


The crime drop in comparative perspective: The impact of the economy and imprisonment on American and European burglary rates

Richard Rosenfeld & Steven Messner
British Journal of Sociology, September 2009, Pages 445-471

Influential statements on recent American crime reductions maintain that the crime drop was confined to the USA. Yet other research has revealed comparable crime decreases in Europe. We suggest that the USA and European crime declines occurred in tandem because they were both brought about by upturns in the economy. In light of US research showing crime reductions resulting from growth in imprisonment, we also examine the possibility that rising imprisonment rates reduced European crime rates. We test these hypotheses in a pooled cross-sectional time-series analysis of burglary rates in the USA and nine European nations between 1993 and 2006. The results indicate that burglary declines in the US and Europe were associated with rising consumer confidence. By contrast, imprisonment appears to be significantly related to burglary rates only after unusual policy interventions, such as Italy's 2006 clemency measure that dramatically reduced the size of its prison population. We interpret these findings as reflecting the structural similarity and economic integration of the world's developed nations and the uneven convergence in US and European punishment policies.

Pornography, public acceptance and sex related crime: A review

Milton Diamond
International Journal of Law and Psychiatry, September-October 2009, Pages 304-314

A vocal segment of the population has serious concerns about the effect of pornography in society and challenges its public use and acceptance. This manuscript reviews the major issues associated with the availability of sexually explicit material. It has been found everywhere it was scientifically investigated that as pornography has increased in availability, sex crimes have either decreased or not increased. It is further been found that sexual erotica has not only wide spread personal acceptance and use but general tolerance for its availability to adults. This attitude is seen by both men and women and not only in urban communities but also in reputed conservative ones as well. Further this finding holds nationally in the United States and in widely different countries around the world. Indeed, no country where this matter has been scientifically studied has yet been found to think pornography ought be restricted from adults. The only consistent finding is that adults prefer to have the material restricted from children's production or use.


Are gamblers more likely to commit crimes? An empirical analysis of a nationally representative survey of US young adults

Christopher Clark & Douglas Walker
International Gambling Studies, August 2009, Pages 119-134

We examine the relationship between gambling and criminal behaviour using data from the National Longitudinal Study of Adolescent Health (Add Health). Our data set includes survey responses from 6145 young adults. The results of our empirical analysis are consistent with the gambling literature in which it is suggested that higher gambling losses increase the propensity to commit crime. This study complements the current literature, as our data and empirical analysis allow us to control for many variables that have been neglected in previous studies, including various forms of gambling. Our findings provide useful information on the general relationship between gambling behaviour and criminal behaviour.


Do Returning Parolees Affect Neighborhood Crime? A Case Study of Sacramento

John Hipp & Daniel Yates
Criminology, August 2009, Pages 619-656

This study used a unique data set that combines information on parolees in the city of Sacramento, CA, over the 2003-2006 time period with information on monthly crime rates in Sacramento census tracts over this same period, providing us a fine-grained temporal and geographical view of the relationship between the change in parolees in a census tract and the change in the crime rate. We find that an increase in the number of tract parolees in a month results in an increase in the crime rate. We find that more violent parolees have a particularly strong effect on murder and burglary rates. We find that the social capital of the neighborhood can moderate the effect of parolees on crime rates: Neighborhoods with greater residential stability dampen the effect of parolees on robbery rates, whereas neighborhoods with greater numbers of voluntary organizations dampen the effect of parolees on burglary and aggravated assault rates. Furthermore, this protective effect of voluntary organizations seems strongest for those organizations that provide services for youth. We show that the effect of single-parent households in a neighborhood is moderated by the return of parolees, which suggests that these reunited families may increase the social control ability of the neighborhood.

Exposure to Violent Crime During Incarceration: Effects on Psychological Adjustment Following Release

Paul Boxer, Keesha Middlemass & Tahlia Delorenzo
Criminal Justice and Behavior, August 2009, Pages 793-807

In this study, formerly incarcerated violent (n = 38) and nonviolent (n = 86) offenders were assessed for their experiences as witnesses to or victims of violent crime during incarceration as well as outside of the prison or jail setting. Participants also provided information on several indicators of their current psychological adjustment. Analyses showed that, after controlling the effects of exposure to violence outside of the prison setting as well as a number of demographic factors, encounters with violence during incarceration were significantly related to aggressive and antisocial behavioral tendencies as well as emotional distress. In general, individuals who were witnesses, as well as victims, of violent crime showed the poorest adjustment post-release. These effects were not modified by violent offender status or by time since release from incarceration. The findings presented here underscore important new directions for research on the effects of exposure to violence.


Estimating a Dose-Response Relationship Between Length of Stay and Future Recidivism in Serious Juvenile Offenders

Thomas Loughran, Edward Mulvey, Carol Schubert, Jeffrey Fagan, Alex Piquero & Sandra Losoya
Criminology, August 2009, Pages 699-740

The effect of sanctions on subsequent criminal activity is of central theoretical importance in criminology. A key question for juvenile justice policy is the degree to which serious juvenile offenders respond to sanctions and/or treatment administered by the juvenile court. The policy question germane to this debate is finding the level of confinement within the juvenile justice system that maximizes the public safety and therapeutic benefits of institutional confinement. Unfortunately, research on this issue has been limited with regard to serious juvenile offenders. We use longitudinal data from a large sample of serious juvenile offenders from two large cities to 1) estimate a causal treatment effect of institutional placement, as opposed to probation, on future rate of rearrest and 2) investigate the existence of a marginal effect (i.e., benefit) for longer length of stay once the institutional placement decision had been made. We accomplish the latter by determining a dose-response relationship between the length of stay and future rates of rearrest and self-reported offending. The results suggest that an overall null effect of placement exists on future rates of rearrest or self-reported offending for serious juvenile offenders. We also find that, for the group placed out of the community, it is apparent that little or no marginal benefit exists for longer lengths of stay. Theoretical, empirical, and policy issues are outlined.


Racial and Ethnic Recidivism Risks: A Comparison of Postincarceration Rearrest, Reconviction, and Reincarceration Among White, Black, and Hispanic Releasees

Virginia McGovern, Stephen Demuth & Joseph Jacoby
Prison Journal, September 2009, Pages 309-327

Despite a large and rapidly growing Hispanic population in the United States, few researchers have attempted to examine what happens to Hispanic offenders once they have been released from criminal justice control. The present study helps fill this gap by examining differences in the likelihood of recidivism between White, Black, and Hispanic prison releasees using three different recidivism measures: rearrest, reconviction, and reincarceration. The authors use Bureau of Justice Statistics data that track a cohort of offenders for 3 years after their release in 1994 from state and federal prisons. Overall, the study findings show that White releasees have the lowest levels of recidivism and Black releasees have the highest levels of recidivism, net of important legal factors associated with recidivism risk; Hispanic recidivism levels are between those of White and Black releasees. Any conclusions drawn about the relative recidivism risk of Hispanic releasees vis-à-vis Black and White releasees must, however, consider how recidivism is measured. The study finds that Hispanic rearrest and reconviction levels more closely mirror those of Whites, but Hispanic reincarceration levels are more similar to those of Blacks. The authors discuss these findings in light of a growing body of research suggesting that Hispanic defendants may face more punitive outcomes relative to similarly situated White (and even Black) defendants at various stages of the criminal case process because they are perceived as more blameworthy and a greater threat to public safety than other defendants.


Short-Term Changes in Adult Arrest Rates Influence Later Short-Term Changes in Serious Male Delinquency Prevalence: A Time-Dependent Relationship

Ralph Taylor, Philip Harris, Peter Jones, Doris Weiland, Marie Garcia & Eric McCord
Criminology, August 2009, Pages 657-697

The impacts of quarterly adult arrest rates on later male serious delinquency prevalence rates were investigated in Philadelphia police districts (N = 23) over several years using all male delinquents aged 10-15 years who were mandated to more than "straight" probation. An ecological deterrence model expects more arrests to lead to less delinquency later. A community justice or mass incarceration model, the ecological version of general strain theory, and an ecologized version of the procedural justice model, each anticipates more arrests lead to more delinquency later. Investigating quarterly lags from 3 to 24 months between adult arrests and later delinquency, the results showed a time-dependent relationship. Models with short lags showed the negative relationship expected by ecological deterrence theory. Models with lags of about a year and a half showed the positive relationship expected by the other three theories. Indicators needed so future works can gauge the relative merits of each theoretical perspective more accurately are described. The spatial distributions of current and 1920s delinquency rates were compared.

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